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Solve the problem. Round your answer to three decimals. What annual rate of interest is required to triple an investment in 4 years?

Question

Solve the problem. Round your answer to three decimals. 

What annual rate of interest is required to triple an investment in 4 years?

check_circleAnswer
Step 1

We use the following compound interest formula, where

 

A: = future value of the deposit,

P: = principal or amount of money deposited,

r: = annual interest rate in decimal form,

n: = number of times compounded per year,

t: = total time in years.

А %3D Р(1+ —)"
(1)
п
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А %3D Р(1+ —)" (1) п

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Step 2

Now as give in question,

 

A = 3P, t = 4, n = 1,

 

Substi...

3P P(1
1
3P P(1+)
3-(1+r)
34 (1+)
34 -1 r
0.316
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3P P(1 1 3P P(1+) 3-(1+r) 34 (1+) 34 -1 r 0.316

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